It’s an underpublicised truth that a Walworth residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Walworth property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Walworth will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold residencies in Walworth with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Lease extensions in Walworth can be a difficult process. We recommend you get guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Walworth lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Rory owned a studio flat in Walworth being sold with a lease of just over 59 years outstanding. Rory on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Rory to invoke his statutory right. Rory obtained expert advice and was able to make a more informed decision and handle with the matter and sell the property.
In 2013 we were contacted by Dr Ollie Watson who, having was assigned a lease of a one bedroom apartment in Walworth in November 2001. The question was if we could approximate the price could be for a ninety year lease extension. Comparable properties in Walworth with 100 year plus lease were in the region of £254,200. The mid-range ground rent payable was £60 billed monthly. The lease ran out on 6 January 2077. Having 51 years remaining we approximated the premium to the landlord to extend the lease to be between £43,700 and £50,600 exclusive of expenses.
An example of a Freehold Enfranchisement case for a Walworth residence is 28 Valmar Road in June 2013. this was a case with an absentee freeholder. As a result the leaseholders applied to the Lambeth County Court for an order dispensing with the giving of a notice of claim. On 25 April 2013 District Judge Zimmels made a vesting order and directed that the matter should be transferred to this tribunal to determine the premium. The tribunal concluded on a figure of £1,125 This case affected 3 flats. The unexpired term as at the valuation date was 968 years.